1

IN THE FEDERAL COURT OF MALAYSIA

(APPELLATE JURISDICTION)
CIVIL APPEAL NO: 02(f)-12-03/2016(W)

BETWEEN

1. U TELEVISION SDN BHD

2. TAN SRI DATO’ SERI VINCENT TAN CHEE YIOUN … APPELLANTS

AND

COMINTEL SDN BHD … RESPONDENT

Coram: Raus Sharif, CJ

Zulkefli bin Ahmad Makinudin, PCA
Hasan bin Lah, FCJ
Aziah Bte. Ali, FCJ
Jeffrey Tan Kok Wha, FCJ

JUDGMENT OF THE COURT

Introduction

1. This is an appeal by the appellants against the decision of the

Court of Appeal affirming the decision of the High Court allowing the
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claim of the respondent against the appellants for breach of contract

and dismissing the counterclaim of the appellants against the
respondent. The appellants were the first and second defendants
and the respondent was the plaintiff before the High Court. We shall
refer to the parties as they were before the High Court.

2. The defendants were granted leave to appeal against the

decision of the Court of Appeal on the following question of law:

“Where the onus is upon the plaintiff to establish facts which by

their nature call for or demand expert evidence under section
45 of the Evidence Act 1950, is it open to the Court to hold the
said onus to have been discharged without the plaintiff calling
any expert evidence having regard to the decision of the
Federal Court in Syed Abu Bakar bin Ahmad v. Public
Prosecutor [1984] 2 MLJ 19?”

Background Facts

3. The relevant background facts of the case are as follows:

The plaintiff was a Company involved in the business of
amongst others providing software and hardware solutions in the
broadcast and telecommunication industries. The first defendant was
granted a broadcasting licence under the Communications and
Multimedia Act 1998 to provide digital broadcasting services as a
subscription TV operator which broadcast local and overseas TV
channels.
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4. The system set up by the first defendant experienced various

problems in transmission to viewers. This included poor picture
quality, picture jerking, freezing of frames and intermittent video and
audio streams. The first defendant engaged the plaintiff to provide
technical consultancy services to resolve technical problems that the
first defendant encountered in digital broadcasting.

5. After discussions between the parties, a Letter of Award [“LOA”]

dated 5.12.2006 was issued by which the plaintiff undertook works in
the re-design and transmission enhancement [“the Project”] for the
first defendant on a full turnkey basis. The second defendant
executed a Guarantee and Indemnity to pay on demand all monies
due to the plaintiff under the LOA.

6. The Project consisted of three (3) phases. The contract price

for each phase were as follows:

Phase 1 RM33,394,265.59
Phase 2 RM36,288,215.22
Phase 3 RM45,360,269.02
Total Contract Price RM115,042,749.83

7. Both parties later agreed to remove a certain portion from the

scope of work in the LOA. This resulted in a reduction of the contract
price for phase 1 to RM32,050,850.95. No formal agreement was
executed between the plaintiff and the first defendant. The parties at
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all material times accepted the LOA to be the governing contract

between them.

8. Under the terms of the LOA the plaintiff was to pass a “Proof of
Concept Site Acceptance Test” [“POC SAT”]. The POC SAT was a
test aimed at determining whether the plaintiff’s proposal solutions
resolved the first defendant technical issues. Various drafts of the
test protocol were negotiated between the parties. There were twelve
(12) draft versions of the POC SAT. This culminated in the POC SAT
version 3.8(a).

9. The POC SAT testing was initially scheduled to be tested on 3

days from 16 – 18.4. 2008. However, midway during the test on 16-
04-2008 the first defendant contended that the plaintiff had not
adequately planned and prepared the test. It failed to bring
appropriate equipment to carry out the test. Further the first
defendant observed that the test format of version 3.8(a) was not
suited for the intended purpose of the POC SAT as it would not allow
proper recording of the test presentation and results.

10. The first defendant then deferred the test to the next day when
the first defendant alleged that the plaintiff’s representatives were told
that although version 3.8(a) would be used, that format changes
would have to be made in order to improve the presentation and
procedure of the test format to enable proper tracking of the test and
its results.
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11. The defendants contended that the plaintiff was aware of the
changes and agreed to apply the changes to the the POC SAT.
Consequently the POC SAT was carried on 17.4.2008, 18.4.2008
and 21.04.2008 using reformatted version 3.8(a) which came to be
described as version 3.8(b). It was the defendants’ position that
versions 3.8(a) and 3.8(b) of the POC SAT were similar in substance.
The plaintiff however contended otherwise.

12. The first defendant had made payment to the plaintiff

amounting to RM20,833,053 for the period between 12.12.2006 and
19.3.2008 under the said Project.

13. The plaintiff claimed that by reason of the first defendant’s

failure to make payment when due and by its acts and/or omissions in
preventing and/or interference with the plaintiff’s performance and its
obligation under the LOA, the first defendant had breached and
repudiated the LOA. The plaintiff had no alternative but to terminate
the LOA.

14. Pursuant to the guarantee and indemnity executed by the

second defendant, the plaintiff demanded the amount due to the
plaintiff from the first defendant.

15. The plaintiff in its statement of claim sought the following reliefs:
(i) General damages for breach of contract in the sum of
RM21,278,498.10 comprising:
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(a) amount due and owing for work done by the plaintiff
in the sum of RM11,217,797.84.
(b) amount due and owing to the plaintiff pursuant to
clause 15C(1) and 15C(II) of the LOA in the sum of
RM10,160,700.26;
alternatively, damages for breach of contract in a
sum to be assessed, by the first and second
defendants and/or each of them in such proportion
(if any) as may be determined by the court;
(ii) Special damages for storage and insurance costs of the
Transmitters in the sum of RM162,517.10 as of 23.6.2010
and still continuing;
(iii) Costs;
(iv) Interest on such amounts of special and/or general
damages as may be awarded by this Court; and
(v) Such further and other relief as deems fit.

16. The first defendant’s counterclaim against the plaintiff sought

the following reliefs:

(i) the sum of RM20,833,053 to be paid by the plaintiff to the

first defendant within fourteen (14) days of the date of the
Court’s Order;
(ii) general damages for breach of contract to be assessed
by the Court;
(iii) interest at the rate of 8% per annum on all sums
adjudged to be paid by the plaintiff to the first defendant;
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(iv) costs on a solicitor and client basis; and

(v) further and other relief as the Court deems proper.

Findings of the High Court

17. The main issues for determination before the High Court as
found by the learned High Court Judge are as follows:

(1) Whether the POC SAT version 3.8(a) and 3.8(b) were the
same or were they different; and
(2) Whether the plaintiff had passed the POC SAT either
based on version 3.8(a) or 3.8(b).

18. The learned High Court Judge came to a finding that the
plaintiff had passed the POC SAT and hence allowed the plaintiff’s
claim and dismissed the defendants’ counterclaim for the following
reasons, amongst others:

(1) The defendants’ witnesses lacked expertise and technical

knowhow despite holding senior management positions in
the first defendant and being involved in the project. [See
paragraph 57 of the Judgment of the High Court].
(2) The plaintiffs’ witnesses PW2 and PW3 demonstrated that
they had the technical expertise and knowhow of the
working of the Project. [See paragraph 58 of the
Judgment of the High Court].
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(3) The plaintiff’s evidence that the POC was a standalone

system was to be preferred over the defendants’
contention that the POC was an end-to-end broadcast
solution. [See paragraph 59 of the Judgment of the
High Court].
(4) Versions 3.8(a) and 3.8(b) are different. [See paragraph
61 of the Judgment of the High Court].

Findings of the Court of Appeal

19. The Court of Appeal affirmed the decision of the High Court and
dismissed the defendants’ appeal. The learned Judges of the Court
of Appeal in their Judgment stated that the crucial issue raised in the
case was, what was the correct test protocol to be used: version
3.8(a) or version 3.8(b). [See paragraph 53 of the Judgment of the
Court of Appeal].

20. The Court of Appeal took note of the learned High Court
Judge’s finding that the plaintiff’s witnesses, PW2 and PW3,
demonstrated that they had the technical expertise and knowhow of
the workings of the Project. This led the Court of Appeal to affirm the
decision of the High Court and to hold that the test protocol version
3.8(b) utilized was not mutually agreed to by the parties and that it
was substantially different from version 3.8(a) and that thus the
plaintiff was entitled to reject the test results of the test protocol of
version 3.8(b).
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Submissions of the Defendants

21. Learned Counsel for the defendants submitted that the plaintiff
was supposedly the expert who would solve the problems faced by
the first defendant in its digital broadcasting. The main point in the
case before the High Court was whether the plaintiff had solved the
problem that it was engaged to remedy. What this meant was
whether the POC SAT had been achieved.

22. It was the contention of the defendants that the issues raised
before the Court were admittedly of a technical nature. Learned
Counsel for the defendants submitted that the learned High Court
Judge did not direct parties to lead expert evidence on the technical
issues. Parties were left to determine the nature of their evidence
thought sufficient to establish their respective cases. Consequently,
no expert witness was called by either party at the trial.

23. The defendants contended that the plaintiff’s fact witnesses,

PW2, PW3 and PW4, who claimed to have a technical background,
amongst others, at the trial had made the following critical admissions
in their evidence on essential points which wholly undermined the
plaintiff’s case as follows:

(i) the test criteria and components of POC SAT version

3.8(a) and 3.8(b) were the same. The diagrams drawn to
illustrate versions 3.8(a) and 3.8(b) were also the same;
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(ii) the plaintiff was aware and accepted that whether the
system had “frozen” during the POC SAT was not the
only criteria for the plaintiff to pass;
(iii) the plaintiff recognized the first defendant’s desire to test
the system functionality and performance from end-to-
end;
(iv) the POC SAT conducted in April 2008 was not a trial run;
and
(v) there were no documents to show that the plaintiff had in
fact passed version 3.8(a).

24. The first defendant also contended that the test results
recorded failure of the plaintiff’s solutions at various stages, resulting
in the failed POC SAT. The plaintiff refused to accept the test results
and attempted to declare the test result as void, alleging the tests to
be merely a ‘trial run’.

25. Upon the plaintiff’s request, parties considered a re-test but no

re-test was conducted as parties could not agree on the scope of the
revised POC SAT.

26. It was the defendants’ case that the plaintiff’s failure to rectify
the failed POC SAT was a breach of the plaintiff’s obligations as a full
turnkey contractor under the terms of the LOA and of the
representations made by the plaintiff of its skills and expertise.
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27. It was the contention of the defendants that the plaintiff’s

breach resulted in the Project being suspended and stalled, including
the re-test of the POC SAT, Network Operation Centre Acceptance
Tests (NOC SAT) and installation of the Transmitters.

Submissions of the Plaintiff

28. It was the submission of the plaintiff that the dispute between
the parties was essentially a contractual dispute over the agreed test
protocol version to be used for the tests conducted jointly between
representatives from both sides. In this regard the learned High
Court Judge was not called upon to decide on technical questions or
any mater involving scientific knowledge or knowhow.

29. It was the contention of the plaintiff, that there was concurrent
finding of fact by the Courts below that the first defendant deliberately
failed to use the test version designed by the plaintiff and effectively
prevented or hindered the plaintiff from completing the Project.

30. On the part of the plaintiff, its onus was to prove what was the
test protocol agreed by the parties under clause 15B of the LOA and
not the technical components of the same or how it worked. It was
submitted that expert evidence was neither relevant nor necessary
given what was agreed by the parties. If the first defendant thought
otherwise it could have called an independent technical witness to
prove the compatibility between versions 3.8(a) and 3.8(b).
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31. It was the contention of the plaintiff that in the circumstances of

the case it did not see any necessity to call an expert witness on the
issues in dispute.

Decision

32. It is to be noted at the outset that the learned Judges of the

High Court and the Court of Appeal took the view that the technical
nature of the evidence presented by the parties required technical
expertise.

33. The main issue for determination in the case before the High
Court was whether the POC SAT had been performed and the results
achieved. The plaintiff contended it met the test. The defendants
contended otherwise. Neither side called an expert to determine
whether the test had been met. Nevertheless, the learned High Court
Judge treated the two important witnesses of the plaintiff [PW2 and
PW3] as if they were experts.

34. It is our considered view that the fact that since both the Courts
below determined that there was a need for technical evidence for
parties to prove their respective case, the pertinent question to be
resolved in this case is whether the approach adopted by both the
High Court and the Court of Appeal was correct as regards the
discharge of the burden of proof by the plaintiff seeking judgment in
respect of matters of a technical nature.
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35. On the meaning and application of the term “burden of proof”

section 101 of the Evidence Act 1950 [“the Act”] states that it is the
burden to establish a case which rests throughout on the party who
assert the affirmative of the issue. The “burden of proof” in section
102 of the Act is the burden to adduce evidence, to make out or rebut
the claim. The “burden of proof” in section 102 of the Act shifts from
one side to the other according to the weight of the evidence.

36. In the Federal Court’s case of Letchumanan Chettiar

Alagappan @ L. Allagappan & Another v Secure Plantation Sdn.
Bhd. [2017] 5 CLJ 418 his lordship Jeffrey Tan, FCJ cited with
approval the principle laid down in the case of Ranchhodbhai v.
Babuhai AIR 1982 Guj 308 as regards the “burden of proof” to
establish a case which never shift and the shifting burden to adduce
evidence in the context of sections 101 and 102 of the Indian
Evidence Act which are identical to sections 101 and 102 of our Act
as follows:

“It is also well to bear in mind that there is an essential distinction

between ‘burden of proof’ and ‘onus of proof’; burden of proof lies
upon the person who has to prove a fact and it never shifts, but the
onus of proof shifts. Such a shifting of onus is a continuous process
in the evaluation of evidence. [See Raghavamma v. Chenchamma,
AIR 1964 SC 136]. Burden of proof has two distinct meanings,
namely, (i) the burden of proof as a matter of law and pleadings, and
(ii) the burden of proof as a matter of adducing evidence. Section
101 of the Evidence Act deals with the former and Section 102 of the
Evidence Act with the latter. The first remains constant but the
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second shifts. In a claim application, therefore, the burden of proof, in

the first sense, certainly lies on the claimant. If he examines himself
and his witness, if any, and if the evidence, tested in the light of the
principle as set out above, is found to be acceptable, the onus shifts
on the tortfeasor to prove those circumstances, if any, which dislodge
the assertions of the claimants. If the tortfeasor fails to prove before
the Court any fact or circumstance which tends to affect the evidence
led by the claimant, the claimant would be entitled to ask the Court to
hold that he has established the case and, on that basis, to make a
just award it would thus appear, that though the legal burden, - the
burden as a matter of law and pleadings – remains constant on the
claimant, the burden as a matter of adducing evidence changes often
times as the trial of the claim petition progresses.”

37. In the present case the learned High Court Judge recognized
that the parties differed in their interpretation of the POC SAT. The
defendants understood it to be a model of the end-to-end broadcast
solution whereas the plaintiff viewed the POC SAT as a standalone
system. The learned High Court Judge further recognized that the
parties differed on the issue of whether POC SAT versions 3.8(a) and
3.8(b) were the same.

38. We are of the view the issues surrounding the POC SAT were
technical in nature and were pivotal in determining whether the first
defendant wrongfully prevented the plaintiff from performing the LOA
as contended by the plaintiff.

39. It is noted that the learned High Court Judge decided on the
burden of proof for the plaintiff to prove its case on this technical
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issue based on the evidence provided by its fact witnesses namely

PW2 and PW3. The plaintiff’s fact witnesses were preferred by the
learned High Court Judge on the basis that PW2 and PW3
demonstrated that they had the technical expertise and knowledge of
the working of the Project.

40. The learned High Court Judge accepted PW2 and PW3 as
experts when in our view they did not satisfy the test under section 45
of the Act. Section 45 of the Act provides:

“45. (1) When the Court has to form an opinion upon a point of foreign
law or of science or art or as to identify or genuineness of handwriting or
finger impressions, the opinions upon that point of persons specially
skilled in that foreign law, science or art or in questions as to identity or
genuineness of handwriting or finger impressions, are relevant facts.
(2) Such persons are called experts.”

41. For a witness to be an expert, he must be truly independent

and skilled in the area in which he is giving evidence. [See the case
of Batu Kemas Industri v. Kerajaan Malaysia Tenaga Nasional
Berhad (2015) 5 MLJ 52]. In accepting the plaintiff’s case the
learned High Court Judge relied in particular on the testimony of
PW2, the plaintiff’s Senior Manager who was personally involved in
the technical aspects of the Project and who coordinated and
oversaw the implementation of the Project and participated in the
discussions to finalise the test protocol for the POC SAT with the first
defendant. Reliance was also placed on the evidence of PW3, the
CEO of the plaintiff’s company.
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42. In contrast, the learned High Court Judge rejected and

disbelieved the testimony of the defendants’ witnesses, DW1 and
DW2, that the definitive version was version 3.8(b), particularly
because DW1 and DW2 were not technical experts for the POC SAT,
but were accountants by profession.

43. It is our finding that both the plaintiff’s witnesses, PW2 and
PW3, fell far short of the required standard of an expert witness under
section 45 of the Act. PW2 was the Senior Manager and PW3 the
plaintiff’s CEO and director. Both witnesses can hardly be described
as independent. As members of the plaintiff’s Senior Management
team they should have been treated as having an interest in the case.
This fact by itself should have disqualified them as truly independent
witnesses.

44. It is our considered view that the learned High Court Judge,
who formed the view that the issues required technical evidence, was
in no position to make a determination of those technical issues
without such expert evidence as the provision of section 45 of the Act
applied.

45. In the context of the present case we are of the view that expert
evidence was required. The plaintiff’s witnesses, namely PW2 and
PW3 were witnesses of facts and could not be characterized as
experts. It was not, but was found by the learned High Court Judge,
a question of accepting the testimony of plaintiff’s witnesses PW2 and
PW3 and disbelieving the testimony of the defendants’ witnesses,
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DW1 and DW2, on the issues raised. There being no expert

evidence, the learned High Court Judge was in no position to make a
determination of these technical issues. On this point, we would like
to refer to the observation made by Abdul Hamid, FCJ (as he then
was) in the case of Syed Abu Bakar bin Ahmad v. Public
Prosecutor [1984] 2 MLJ 19 at page 23 as follows:

“Our law is clear in that under section 45 of our Evidence Act 1950 it
is provided that…The scope of this section can be found in the
commentary in Sarkar on Evidence 12th ed. at page 488 where, while
recognizing that opinion in so far as it may be founded on legal
evidence shall be the function of the tribunal whose province alone it
is to draw conclusions of law or fact –

‘There are however cases in which the Court is not in a position to

form a correct judgment without help of persons who have
acquired special skill or experience on a particular subject, e.g.
when the question involved is beyond the range of common
experience or common knowledge or when special study of a
subject or special training or special experience therein is
necessary. In such cases the help of experts is required. In these
cases, the rule is relaxed and expert evidence is admitted to
enable the court to come to a proper decision.’
…
Since the document was not examined by any person who has
acquired a special skill or expert in the particular subject, i.e.
handwriting, the question therefore is was the learned High Court
Judge right in making the finding of fact that he did in the absence
and without the aid of expert evidence?
…
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It is settled principle that while it is true that a Judge who sits alone is
entitled to weigh all the evidence, to put his own magnifying glass to
determine the probabilities so to speak and form his own opinion or
judgment, it would be erroneous for him to form a conclusion on a
matter which could only be properly concluded with the aid for expert
evidence.” [Emphasis added]

46. It is to be noted that the plaintiff did not lead their evidence on
the basis upon which its witnesses were experts and as such their
evidence were not scrutinized on that basis. On this point in PB
Malaysia Sdn Bhd v. Samudra (M) Sdn Bhd [2009] 7 MLJ 681 at
702, Ramli Ali J. (as he then was) held that:

“Opinions of experts are admissible to furnish the court with scientific

information which is unlikely to be within the experience and
knowledge of a judge, (s 451(1) of the Evidence Act 1950).
Where expert testimony is required on certain matters including
technical matters relevant in allegations of professional negligence (in
this case, against a consulting engineer), it is not open to the court to
decide on such matters in the absence of such evidence.”
[Emphasis Added].

47. The decision of Mohamed Azmi SCJ in Junaidi bin Abdullah

v. Public Prosecutor [1993] 3 MLJ 217 is also relevant and
instructive on the need to call expert evidence wherein his lordship
had this to say:
“In our view, the test to be applied for the purpose of section 45 of the
Evidence Act 1950 is this. First, does the nature of the evidence
require special skill? Second, if so, has the witness acquired the
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necessary skill either by academic qualification or experience so that

he has adequate knowledge to express an opinion on the matter
under enquiry? The answer to both questions must necessarily
depend on the facts of each particular case. The specialty of the skill
required of an expert witness under section 45 would depend on the
scientific nature and complexity of the evidence sought to be proved.
The more scientific and complex the subject matter, the more
extensive and deeper will the court be required to enquire into the
ascertainment of his qualification or experience in the particular field
of art trade or profession.” [Emphasis Added].

48. It was submitted for the plaintiff that if the first defendant held
the view that expert evidence was relevant and necessary to prove
the compatibility between versions 3.8(a) and 3.8(b) it was for the first
defendant to call such independent technical witness. With respect
we could not agree with such a contention.

49. It must be borne in mind that the burden was on the plaintiff to
put sufficient material before the High Court to discharge its burden of
proof. It should also be noted that the defendants approached the
matter on the basis that the admissions of the plaintiff’s so-called
technical witnesses on essential points had wholly undermined the
plaintiff’s own case, which can be seen as follows:

(1) The plaintiff’s witness PW2, the Senior Manager of the

plaintiff’s system and Network Department in re-
examination when asked whether the test criteria and
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components of POC SAT versions 3.8(a) and 3.8(b) were

the same had this to say:
“PC: Why did you all come out with version 3.8(b)?
A: We did not come out with 3.8(b). When we received the
result it’s actually the 3.8b result, yes. The test was carried
out on 3.8(a). But, the result when come back is on 3.8(b).
PC: Was the criteria used in 38(a), the same as been used in
3.8(b)?
A: Yes. The content layer measurement, transcoding test is
the same criteria stated.
PC: The same criteria?
A: Yes.”

[See lines 11-24 at page 198 of the Records of

Proceedings].

(2) The plaintiff was also aware and accepted that whether
the system had “frozen” during the POC SAT was not the
only criteria for the plaintiff to pass. The plaintiff’s witness
PW4, one of the directors of the plaintiff in cross-
examination on this point had this to say:
“DC: Another words,….if you look at page 629 that is on the
Content Acquisition test stage and you look at page 639,
that is on the offline editing stage and finally you look at
page 650 that is on the Compression and Delivery test
stage. It does include a human perception element where
the testing the parameters is to check whether there is video
pixelization whether there is any video audio jerking and
freezing, video noise, video crackle, audio rumble so on and
so forth. So, therefore I said looking at all this, POC SAT is
 21

not just about whether STB freezes or otherwise, it is a little

bit more than that?
A: Yes, if you look at the main complaint by the operator is set
topbox freeze. So the first thing is to solve this set topbox
freeze and there is a recommendation to change WMV9 out
and replace it with MPEG-4. Okay. The rest are basically a
perception which is visual…for example pixelization and all
that. We can carry out all kinds of test, and that would not
be a problem.”

[See lines 25-41 at page 276 of the Record of

Proceedings]

(3) The plaintiff’s witness PW2 admitted during cross-

examination that the POC SAT test concluded in April
2008 was not a trial run:
“DC: Now, I understand from Goh that these 4 days…right, 16th ,
17th , 18th and 21st was actually a POC SAT and they are not
the trial run.
A: Yes, My Lady.”

[See lines 4-8 at page 111 of the Record of

Proceedings]

(4) PW3, the plaintiff’s CEO and director in cross-examination

could not show that the plaintiff had in fact passed version
3.8(a):
“DC: As far as you understand, you have already passed your
portion. That’s where I wanted to take it further and say, is
there any documents to show that you have passed your
 22

portion. You, in the sense of Comintel have passed the

Comintel’s portion.
A: By looking at the result form the test result given by the
UTV, just on the original scope for the POC.
DC: But, you don’t have your own document to show that you
have passed?
A: I can’t recall whether we have that.”

[See lines 10-20 at page 241 of the Record of

Proceedings]

(5) The plaintiff’s witness PW3 agreed that the onus was on
the plaintiff as the vendor to document and prepare the
test result.
“DC: Now, as a vendor, is it not in your interest to see that, you
passed the POC SAT, is it also not in your interest to make
recording of what was the results.
A: Yes, it is our interest.”

[See lines 24-28 at page 237 of the Record of

Proceedings]

50. The High Court found that there was a need for technical
evidence but, however, it preferred the evidence of the plaintiff on the
basis of its so-called technical witnesses. It is our judgment, when it
was determined that there was a need for technical evidence, it was
incumbent on the plaintiff to lead evidence through experts. It did not
do so and by reason of that failure had failed to discharge its “burden
of proof” under sections 101 and 102 of the Act. Consequently the
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“onus of proof” did not shift to the defendants to dislodge the

assertions made by the plaintiff as the claimant.

51. Learned Counsel for the defendants also raised an additional

point in his submission. This was the question of whether the first
defendant breached the terms under the LOA in not performing its
obligations. It was the contention of the defendants that for a party to
be held liable for breach of contract, he must be shown to have
committed a breach going to the root of the contract. [See Rasiah
Munusamy v. Lim Tan & Sons Sdn Bhd (1985) 2 MLJ 291 at p.
294]. In the present case, the first defendant had shown its
willingness to perform the contract. In the first place, it had paid 65%
of the contract sum for phase 1. It wanted the glitches in the system
to be removed. The plaintiff did not do that. Instead the plaintiff
terminated the contract.

52. It is to be noted in this case that the issue as to whether POC

SAT had been achieved or not had not been determined in view of
the conflicting contention of the parties. The plaintiff contended it met
the test. The defendants refuted that. However, from the evidence
adduced before the learned High Court Judge, the test results
recorded failure of the plaintiff’s solutions at various stages, resulting
in the failed POC SAT. The plaintiff refused to accept the test results
on the ground that the first defendant adopted the POC SAT based
on version 3.8(b) which the plaintiff claimed was not agreed upon by
the parties. Upon the plaintiff’s request, parties considered a re-test
but no re-test was conducted as parties could not agree on the scope
 24

of the revised POC SAT. Therefore, on the evidence before the

Court, the POC SAT based on version 3.8(a) was at no time
performed and achieved, but yet the learned High Court Judge came
to a finding that the plaintiff had passed the POC SAT. This to us
was an erroneous finding.

53. Based on the facts and the circumstances of the case it is our
considered view that the plaintiff’s failure to rectify the failed POC
SAT was a breach of the plaintiff’s obligations as a full turnkey
contractor under the terms of the LOA and of the representations
made by the plaintiff of its skills and expertise. The failure of the POC
SAT effectively prevented the Project from moving forward as the
delivery of transmission sites and the testing and acceptance of the
redesigned Network Operation Centre were contingent on the plaintiff
having passed the POC SAT. In this regard, the plaintiff could not
contend that the first defendant wrongly prevented it from performing
the LOA.

54. It can be said in this case that the first defendant did not receive
what it contracted for. The turnkey contract required the plaintiff to
remove the technical faults faced by the defendant in the system.
Accordingly, we are of the view that there was a total failure of
consideration on the part of the plaintiff to perform its obligations
under the contract. [See the cases of Stocznia Gdanska SA v.
Latvian Shipping Co & Others [1998] 1 All ER 883 at 896 and
Damansara Realty v. Bangsar Hill Holdings Sdn Bhd & Others
[2011] 6 MLJ 464]. The act of termination of the contract by the
 25

plaintiff itself amounted to a repudiation under section 40 of the

Contracts Act 1950 which provides as follows:

“When a party to a contract has refused to perform, or disabled

himself from performing, his promise in its entirety, the promisee may
put to an end to the contract, unless he has signified, by words or
conduct, his acquiescence in its continuance.”

55. There was no judicial appreciation of the evidence by the

learned High Court Judge of the High Court in coming to the
conclusion that the plaintiff had discharged its burden of proof of
proving its case. The Court of Appeal also failed to exercise its
powers of appellate intervention in not reversing the findings of the
learned High Court Judge. It is therefore appropriate for this Court to
exercise its powers of appellate intervention and reverse the findings
and the decision of the High Court. In the circumstances of this case,
it is our considered view that the plaintiff had not proved its case on
balance of probabilities against the defendants.

56. For the reasons above stated we would allow this appeal with
costs. The question of law posed is answered in the negative. The
orders of the High Court as affirmed by the Court of Appeal are
hereby set aside. As regards the counterclaim of the defendants
against the plaintiff, we would allow the counterclaim with costs to the
extent of only the recovery of the sum of RM20,833,053 already paid
to the plaintiff by the defendants under the contract sum for phase 1
of the Project with interest at the rate of 8% per annum, so as to put
 26

the parties back to their original positions. The deposit is to be

refunded to the defendants.

(ZULKEFLI BIN AHMAD MAKINUDIN)

President
Court of Appeal

Dated: 18th August 2017

Counsel for the Appellants

Datuk Seri Gopal Seri Ram, Clinton Tan Kian Seng and David Yii.

Solicitors for the Appellants

Messrs. Thomas Philip

Counsel for the Respondent

Dato’ Cyrus Das, Nahendran Navaratnam, Wong Wye Wah and Tan
Min Lee.

Solicitors for the Respondent

Messrs. Gan Partnership